Legislative Update

Monday, October 5, 2015
October 5, 2015 Legislative Update

The North Carolina General Assembly adjourned September 30, 2015. The House and the Senate will begin the 2016 “short” session April 25, 2016

N.C. General Assembly Adjourns 2015 “Long” Session

The North Carolina General Assembly adjourned the 2015 session around 4 a.m. September 30, making it one of the longest sessions in more than a decade. Legislators began their work January 28 and ran 13 weeks past the end of the fiscal year June 30, making it the longest legislative session since 2012.

The House and Senate began their session focused on top priorities such as regulatory reform, Medicaid reform, job creation policies and the state spending plan. The session ended with nearly three hundred bills passed into law. The General Assembly will return to Raleigh for its 2016 “short” session April 25, 2016. Upon adjournment, Governor McCrory has 30 days to act on a bill and is required to reconvene the General Assembly if a bill is vetoed.

During the interim, in between adjournment and the date the General Assembly reconvenes, the speaker and president pro tempore may authorize oversight committees to meet.  Usually the General Assembly will pass a bill at the end of session authorizing agreed upon studies and reports to be completed by the oversight committees during the interim.  However, this year the speaker and president pro tempore chose not to pass such a bill, but rather complete any studies through the Legislative Research Commission (LRC) chaired by Senator Tom Apodaca (R-Henderson).

N.C. Governor Signs Economic Development Bill Into Law

Last week, Governor McCrory signed House Bill 117 — NC Competes Act — into law. Upon signing, the governor stated, “This plan sends a signal that we’re ready to compete with any state or nation to bring good-paying jobs to North Carolina. This plan coupled with the quality of life improvements we’ve made in education, health care and transportation, will demonstrate to companies that nothing compares to North Carolina when it comes to growing their business.”

The Charlotte Chamber applauds the North Carolina General Assembly and the governor for negotiating a compromise spending and economic development package. Thanks to strong efforts by Charlotte region legislators, Representative Bill Brawley and Representative Jason Saine, as well as Governor McCrory, efforts to redistribute sales tax revenues were thwarted and the state’s economic development toolbox has been strengthened.

The new law makes changes to the Job Development and Investment Grant (JDIG) and OneNC programs, several changes to the tax code, and a section dealing with tax compliance and fraud prevention.  However, HB 117 does not address the sunset of several tax credits including renewables, and research and development. 

N.C. General Assembly Passes Infrastructure Bond Proposal

Just after midnight Wednesday,  the North Carolina House gave final approval to House Bill 943 — Connect NC Bond Act of 2015.  The bill authorizes the state to issue $2 billion in bonds for economic development and infrastructure projects, upon the approval by a majority of the voters.  The bond issue will be included on the North Carolina presidential primary election ballot in March 2016.  The economic development and infrastructure projects funded by the bond must be consistent with Governor McCrory’s Connect NC Plan.  The bond package has been a priority for the governor this session.

The following projects are among those to benefit from the bond funding and are included in HB 943:

  • $980,000,000 in funding for various building renovations and construction at several University of North Carolina universities.
  • $350,000,000 in funding for construction, repairs and renovations at various North Carolina community colleges.
  • $312,500,000 for local parks and infrastructure.
  • $70,000,000 for readiness centers for the National Guard.
  • $179,000,000 for two agriculture projects at NC State University and the Department of Agriculture and Consumer Services.
  • $100,000,000 for state parks and attractions.
  • $8,500,000 for the Samarcand Training Academy in Moore County.

Comprehensive Regulatory Reform Package Passes

Late Tuesday night, the North Carolina House adopted the conference report to House Bill 765 —  Regulatory Reform Act of 2015.  The Senate adopted the report Monday.  The bill makes several statutory changes, including regulatory changes to various administrative statutes, eliminating certain statutes and regulations, and modernizing or simplifying regulations.

Some highlights from the conference report include:

  • Shifts the burden of proof in certain contested cases.
  • Prohibits licensees from serving as investigators and inspectors on occupational licensing boards.Exempts small business entities buying or selling entity-owned property.
  • Amends the definition of “employee” under the Workers’ Compensation Act to exclude volunteers and officers of certain nonprofits.
  • Expands the good Samaritan law to breaking into or out of railroad cars, motor vehicles, trailers, aircraft, boats or other watercrafts.
  • Directs the Environmental Review Commission to study open and fair competition with respect to materials used in wastewater, storm water and other water projects.
  • Creates two studies on 1) electronic recycling programs and 2) permitting and recycling programs for utility-scale solar projects.
  • Amends the risk-based remediation statutes.
  • Amends the definition for “prospective developer” under brownfields redevelopments.
  • Makes amendments to isolated wetlands laws.
  • Studies and amends storm water laws.
  • Creates a study of flood elevations and building height requirements.

The bill will now go to the governor for his consideration.

N.C. Legislators Pass Technical Corrections to Budget and General Statutes

Two bills passed the North Carolina House and Senate last week, making technical corrections to general law and the state budget. The House concurred to Senate changes early Wednesday morning for House Bill 259 — General Government Technical Corrections. The bill is largely technical changes to the new state spending plan.

And the House took the lead on the bill making technical corrections to general law, Senate Bill 119 — GSC Technical Corrections 2015.  The House added several policy provisions to SB 119, so the Senate voted not to concur and sent SB 119 to a conference committee just after midnight Wednesday morning.  Negotiations on the bill were finalized and presented around 4 a.m. Wednesday.  The vast majority of the policy provisions were struck from the bill, leaving mostly technical changes. Those policy provisions removed will likely be issues for debate during the 2016 legislative session.

Changes to E-Verify Compliance

Last week, House Bill 318 — Protect North Carolina Workers Act — passed both the North Carolina House and Senate chambers.  The bill requires E-verify compliance in certain governmental contracts, clarifies what documents may be used to determine identification or residence, prohibits local governments from adopting sanctuary city ordinances, and prohibits the Department of Health and Human Services from issuing waivers to exempt food stamp recipients from federal work requirements.

The bill will now go to the governor.

N.C. General Assembly Passes Controversial Elections Changes

Three bills passed the North Carolina General Assembly during the last days of session that will change the upcoming North Carolina election cycle: 

  • House Bill 373 — Elections — moves the North Carolina primary date to March 15, 2016, and includes a controversial provision that allows for the establishment of affiliated party committees. Governor McCrory signed the bill into law last week.
  • House Bill 8 — Court of Appeals Election Modifications — changes the North Carolina Court of Appeals races to partisan elections.
  • Senate Bill 119 — GSC Technical Corrections of 2015 — permits Council of State members of the same political party to create an affiliated party committee. Under the legislation, the committee would be able to support the election of candidates of the North Carolina Council of State of the same party. This provision, as with HB373, allows for, but does not require, the establishment of these committees.

Certification of Need (CON) Changes Pass

Late Tuesday, the North Carolina Senate gave final approval to a House committee substitute for Senate Bill 698 — Legacy Medical Care Facility/CON Exempt.  The bill now provides for certain exemptions under the Certificate of Need (CON) law for newly defined “legacy medical care facilities.” A “legacy medical care facility” is a health care facility that is not currently in operation and has not been in operation for at least six months, but has been licensed and providing services within the past two years. The bill will help recently closed hospitals, such as hospitals in Yadkinville and Belhaven.  The bill now goes to the governor for his consideration.

Other Legislation of Note Passes Before Adjournment

Term Limits for Board of Governors Members
Senate Bill 670 limits members of the University of North Carolina Board of Governors to three terms.  A second provision, establishing a process for selection of a UNC System president, was added to the bill Tuesday before the House and Senate gave final sign-off on the legislation. 

Autism Health Insurance Coverage
After being sent to Rules at the end of June, Senate Bill 676 passed both chambers of the General Assembly this week.  The legislation provides for insurance coverage for the treatment of Autism.  It requires health benefits plans to provide coverage for the screening, diagnosis and treatment of Autism. 

Reegan's Rule/Enforce Pharmacy Benefits Management
Senate Bill 694 establishes legislation for the purpose of encouraging parent education of Type I diabetes during certain well-child visits, and amends the law pertaining to pharmacy benefits managers, creating a $100-$1,000 per day per drug penalty if a pharmacy benefits manager is found in violation of the law. 

Industrial Hemp
Senate Bill 313 promotes and encourages the development of an industrial hemp industry in North Carolina

Epi Pens in All Child-Serving Businesses.
House Bill 647 authorizes health care providers to prescribe and pharmacists to dispense epinephrine auto-injectors to authorized entities other than schools for the emergency treatment of anaphylaxis.

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, September 28, 2015
September 28, 2015 Legislative Update

N.C. General Assembly Adjournment: The End is in Sight

With the budget finalized and signed by the governor, the North Carolina General Assembly has turned its attention to adjournment.  Last week, the Senate introduced an adjournment resolution, calling for the General Assembly to adjourn Tuesday, September 29, and reconvene Monday, April 25, 2016. The resolution passed the Senate and is expected to be heard by the House today. 

The resolution, as passed by the Senate, would allow legislators to consider appropriations bills; constitutional amendment bills; bills that have crossed over from one chamber to the other; bills and resolutions that implement recommendations from study committees, authorities and statutory commissions; local bills; election law bills; and for the purpose of overriding a gubernatorial veto, among a variety of other topics, when they reconvene. The House may make modifications to the adjournment date, the date that the General Assembly reconvenes, or to what bills may be considered during the short session.

 

N.C. Governor Receives Economic Development Package

Last week, the conference report to House Bill 117 — NC Competes Act — was approved by both the North Carolina House and Senate.  The Senate voted unanimously in a bipartisan vote to approve the legislation, and the governor is expected to sign the legislation. 

The package contains changes to the Job Development and Investment Grant (JDIG) and OneNC programs, several changes to the tax code, and a section dealing with tax compliance and fraud prevention. The package does not address several tax credits, such as renewable energy and research and development, thereby they will sunset in January. 

Local Government Proposals Move Forward

  • Local Incentives for Historic Rehabilitation
    The North Carolina House gave final approval to Senate Bill 472 — Local Incentives for Historic Rehabilitation. Under this legislation, local governments are given more flexibility in determining what projects qualify for local appropriations for economic development purposes.  The legislation also extends a local government’s authority to make grants or loans for the rehabilitation of commercial or noncommercial historic structures, whether the structure is publically or privately owned. SB 472 was presented to the governor Thursday.
  • County Studies
    The North Carolina House passed Senate Bill 391 — County Omnibus Legislation — which will go to the Senate today for a concurrence vote. The bill reestablishes the State Payment in Lieu of Taxes Study Commission and directs several studies, including ways to control aquatic noxious weeds in state waters and the impact of exempting previously taxable property when acquired by a nonprofit.  The legislation also clarifies requirements on local governments for the deposit of public money.

 

N.C. Governor McCrory Signs Medicaid Reform Into Law

The conference committee report for House Bill 372 — Medicaid Transformation and Reorganization — was approved by both the North Carolina House and Senate and signed into law by Governor McCrory.  The conference report moves away from the state’s current fee-for-service system to a full-risk capitated system and a hybrid system that will include both provider-led entities (PLEs) and managed care organizations (MCOs).

The Senate voted 33-15, mostly along party lines, with two Democrats, Senator Ben Clark (D-Hoke) and Senator Floyd McKissick Jr. (D-Durham), joining with the Republicans.  One Republican, Senator Jeff Tarte (R-Mecklenburg), voted against the conference report. The House voted 65-40, again mostly along party lines. Only one Democrat, Representative George Graham (D-Lenoir), voted in favor of the conference report.  Five Republicans voted against the conference report, one of which was a chair of the conference committee, Representative Nelson Dollar (R-Wake).  Four of Representative Dollar’s Republican colleagues, Representative Pat Hurley (R-Randolph), Representative James Langdon Jr. (R-Johnston), Representative Michael Speciale (R-Craven) and Representative Paul Stam (R-Wake), joined him in voting no to the conference report.

 

Compromise on Regulatory Reform Act Unveiled

Late last week, the conference report for House Bill 765 — Regulatory Reform Act of 2015 — was unveiled, which is a compromise between the North Carolina House and Senate.  Some highlights from the conference report include: 

  • Shifts the burden of proof in certain contested cases.
  • Prohibits licensees from serving as investigators and inspectors on occupational licensing boards.
  • Exempts small business entities buying or selling entity-owned property.
  • Amends the definition of “employee” under the Workers’ Compensation Act to exclude volunteers and officers of certain nonprofits.
  • Expands the good Samaritan law expansion to breaking into or out of railroad cars, motor vehicles, trailers, aircraft, boats or other watercrafts.
  • Directs the Environmental Review Commission to study open and fair competition with respect to materials used in wastewater, storm water and other water projects.
  • Creates two studies on: 1) electronic recycling programs, and 2) permitting and recycling programs for utility-scale solar projects.
  • Amends the risk-based remediation statutes.
  • Amends the definition for “prospective developer” under brownfields redevelopment.
  • Makes amendments to isolated wetlands laws.
  • Studies and amends storm water laws.
  • Creates a study of flood elevations and building height requirements.

 

N.C. House Moves Amended Version of Farm Act

The North Carolina House voted 86-13 last week to give an initial approval to Senate Bill 513 — North Carolina Farm Act of 2015The legislation makes various changes to transportation, environment and other laws in an effort to provide regulatory relief to the agriculture community. Just hours before taking a vote on second reading, the House removed a controversial deer farming provision that would have transferred the captive cervid program to the Department of Agriculture and Consumer Services.

 

N.C. House and Senate Pass Changes to Election Laws

The North Carolina House and Senate approved a conference report to House Bill 373 — Elections — which moves North Carolina’s primary date to March 15, 2016.  The House narrowly supported the conference report, voting 52-49.  The Senate voted to approve the report mostly along party lines, 30-13.

Under the new legislation, candidate filing begins December 1, 2015, and closes December 21, 2015.  Political parties must submit presidential candidate lists by December 16, 2015.  Early voting will begin March 3, 2016, and end March 12, 2016.  The conference report also includes a controversial provision that allows for the establishment of affiliated party committees.  The legislation permits the leader of each political party of the North Carolina House and Senate to establish a separate affiliated party committee to support the election of candidates of that leader’s political party.  The legislation is permissive and does not require the establishment of the affiliated party committees.

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Thursday, September 24, 2015
September 24, 2015 Legislative Update

The Charlotte Chamber applauds the North Carolina General Assembly and the governor for negotiating a compromise spending and economic development package. Thanks to strong efforts by Charlotte region legislators, Representative Bill Brawley and Representative Jason Saine, as well as Governor McCrory. Efforts to redistribute sales tax revenues were thwarted and the state’s economic development toolbox has been strengthened.

N.C. General Assembly and Governor Finalize State Budget

On Friday, after several months of negotiations, Governor McCrory signed the state budget legislation, the compromise spending plan of the North Carolina House and Senate.  The Senate gave its approval of the budget bill Wednesday; the vote was mostly along party lines, with the exception of three Democrats: Senator Ben Clark (D-Hoke), Senator Jane Smith (D-Robeson) and Senator Erica Smith-Ingram (D-Northampton), voting in favor of the budget on its final reading. The House went into session at 5 p.m. Thursday, and debated the bill for five hours.  In the end, nine Democrats voted with 71 Republicans in favor of the budget: Representative Gale Adcock (D-Wake), Representative William Brisson (D-Bladen), Representative Ken Goodman (D-Richmond), Representative Charles Graham (D-Robeson), Representative Susi Hamilton (R-New Hanover), Representative Rodney Moore (D-Mecklenburg), Representative William Richardson (D-Cumberland), Representative Ken Waddell (D-Columbus) and Representative Michael Wray (D-Northampton).  Just after midnight Thursday, the House gave its final approval to House Bill 97 — 2015 Appropriations Act

Review a summary of budget highlights from last week's newsletter.

Compromise Reached on Economic Development Package

Late last week, the final compromise to House Bill  117 — NC Competes Act — was unveiled.  The conference report contains changes to the Job Development and Investment Grant (JDIG) and OneNC programs, several changes to the tax code, and a section dealing with tax compliance and fraud prevention. The package includes:

  • JDIG
    The JDIG program underwent the most modifications.  Under the conference report, the program was given a three-year extension, changing the expiration from January 1, 2016 to January 1, 2019.  The conference report creates a new category of qualifying project called a high-yield (HY) project, which has an investment of at least $500 million in private funds and provides 1,750 jobs.  The conference report allows the grant to be disbursed for 20 years, unless the project becomes disqualified, where the grant will terminate in the year the project becomes disqualified. Additionally, HB 117 will increase the state’s liability cap from $15 million to $20 million for a year in which no grant is awarded for a HY project, and $35 million for years that include a grant awarded to a HY project.  The grant will be available in semiannual commitment limitations less than or equal to 50 percent. The conference report changes the disbursement for projects located in tier 2 counties, to allow only 10 percent of the grant to be diverted to the utility fund.  It also modifies the percentage of withholdings to 80 percent for tier 1 counties and 75 percent for tiers 2 and 3.  The grant will allow businesses that meet the HY requirements for three consecutive years to receive 100 percent of withholdings for each eligible job for the consecutive three years.  Also, it adds a new requirement of local government participation in the recruitment and offer of incentives.  It requires rejected offers to be published in a list.
  • OneNC
    The only change to OneNC is the matching formulas.  Under the conference report, the state will match $3 to every $1 in local money for tier 1 counties, $2 to $1 for tier 2 counties, and $1 to $1 for tier 3 counties.
  • Tax changes
    The conference report provides a tax credit on electricity for datacenters with $75 million in private investment funds.  Aircrafts weighing between 9,000 and 15,000 pounds receive a tax credit on jet fuel.  Modular homes, aircrafts and jet engines are added under the privilege tax.  The conference report exempts motor vehicle service contracts and motor sports parts and fuel from sales tax.  The conference report also includes various changes impacting tax compliance and fraud prevention.
  • Not Included
    The conference report does not address the sunset of several tax credits, set to expire in this fiscal year, including renewables and the Research and Development tax credits.

HB 117 is scheduled to be heard in the Senate this evening and in the House later this week. The finance portion of the state’s budget, HB 97, is contingent on HB 117 becoming law before January 1, 2016.

N.C. House and Senate Pass Local Government Regulatory Reform Bill 

The North Carolina House and Senate voted to approve a conference report to House Bill 44 — Local Government Regulatory Reform 2015.  Highlights of the package include:

  • Provides local governments different options for notice to chronic violators of overgrown vegetation ordinances.
  • Authorizes cities to regulate uninhabitable structures that unreasonably restrict the public’s right to use the state’s ocean beaches.
  • Prohibits local governments from requiring compliance with voluntary state rules and regulations or rules and regulations with a delayed effective date.
  • Repeals the requirement that local governments comprising the local health department maintain operating appropriations from local ad valorem taxes.
  • Provides developers of property located partly within the municipality options to 1) apply the county land use planning ordinances to the entire property or 2) apply the municipality’s ordinances to the portion within the municipality and the county ordinances to the rest of the property.
  • Allows local governments to permit irrigation and drinking water wells.
  • Limits fence wrapping signage to advertising sponsored by a person directly involved in the construction of the project.
  • Removes exception for zoning permits from the Permit Choice statutes, NC Gen. Stat. § 143-755.
  • Makes various changes to the Pre-audit Certification statutes, effective October 1, 2015.
  • Limits local governments’ ability to regulate beehives.
  • Requires notices to adjacent property owners prior to the start of any construction project, but limits the notice period to 15 days.
  • Includes modifications to riparian buffer regulations.
  • Requires zoning density ordinances to provide credits or severable development rights for dedicated right-of-ways.
  • Makes various changes to inspections of buildings certified by licensed architects or licensed engineers.
  • Clarifies local governments’ authority to define bedroom.
  • Provides more flexibility to cities regarding development agreements.

The bill now goes to the governor for his consideration.

N.C. Senate Amends Employee Misclassification Bill 

Last week, the North Carolina Senate signed off on its own version of Employee Misclassification Reform, House Bill 482.  The Senate made substantial changes to the bill.

The Senate Committee Substitute for HB 482 (SCS) requires the advisory council to meet at least quarterly.  The Senate modified the House bill by creating a new appeal process for the employer within the Industrial Commission.  It removes the following two factors the House included in its version of the bill dealing with how independent contractor status was determined: 1) the level of the individual’s investment in equipment or tools required to perform the work, and (2) the individual’s opportunity for profit or loss.  The Senate further removed a requirement that violation of the statute constituted revocation of the violator’s license, and disqualification of some violators from contracting with the state.  It removes the exception for newspaper, shopping news and magazine distributors from the employment definition under the Unemployment Insurance statutes.  Finally, the SCS removes the appropriations to DOR for administration and enforcement of the statute.

The bill is currently in the House Rules Committee.

N.C. House and Senate Slated to Vote on Medicaid Reform Deal

The conference committee report for House Bill 372 — Medicaid Transformation and Reorganization — was reported into the House and Senate chambers. Under the new plan, Prepaid Health Plans (PHPs) will be responsible for the delivery of Medicaid services.

As originally proposed in the Senate’s reform plan, three PHPs will contract with the Division of Health Benefits and will serve recipients statewide. Additionally, the Division of Health Benefits could contract with up to 10 PLEs for regional contracts. Medicaid recipients will be able to choose their preferred plan, whether it is a CP or PLE, or a statewide or regional plan.

Under the new compromise plan DHHS will continue to have full authority to manage the Medicaid and NC Health Choice programs. A new division, however, will be created. The newly-created Division of Health Benefits will be responsible for implementing Medicaid reform, and will eventually take over the duties currently vested in the Division of Medical Assistance (DMA). Twelve months after capitated contracts begin, DMA will be eliminated.

The state’s current LME/MCOs will continue to manage all of the behavioral health services that they currently provide, for at least four years. After that time period, it is possible that behavioral health care could be turned over to the PHPs, if the legislature chooses to do so.

Once HB 372 becomes law, the Division of Health Benefits and a legislative oversight committee, the Joint Legislative Oversight Committee on Medicaid and NC Health Choice, will both be created. Additionally, the new division will be responsible for submitting all necessary waivers and State Plan Amendments (SPAs) to the Centers for Medicare and Medicaid Services. It is expected that the process to obtain all of the proper approval for necessary waivers and SPAs could take from 12 to 24 months. Eighteen months after the state receives approval, capitated contracts under PHPs will begin, and initial recipient enrollment must be complete.

It is expected that the House and Senate will both vote on the measure Tuesday, September 22. Governor McCrory has stated that he plans to sign the legislation.

 

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Tuesday, September 15, 2015
September 15, 2015 Legislative Update

N.C. General Assembly Unveils State Budget Deal

On Monday afternoon, 76 days after the new fiscal year (FY) began, Speaker of the House Tim Moore (R-Cleveland) and President Pro Tempore Phil Berger (R-Rockingham) held a press conference to unveil the details of the new $21.7 billion spending agreement. The budget and money report were published to the public around midnight last night.

With the current continuing resolution (CR) set to end at 11:59 p.m. Friday, September 18, both chambers plan to vote on the measure this week. Speaker Moore and Senator Berger stated at the press conference that they are hopeful that Governor Pat McCrory will sign the budget into law before the CR deadline passes.

The Senate is scheduled to take their first vote on the budget today, Tuesday, September 15, with the final vote on the budget taking place tomorrow, Wednesday, September 16. House rules require the chamber to release the document to the public 72 hours before taking a vote. The chamber plans to vote on the measure Thursday, September 17, followed by a final vote Friday, September 18. Speaker Moore stated Monday that the chamber is considering taking the final vote on the budget early Friday morning, shortly after midnight. After receiving approval from both chambers, the budget will go to the governor’s desk for the final signature into law. Since the budget is a compromise between the House and Senate, amendments are prohibited.

Additionally, it is expected that the Legislature will be taking up the conference reports for House Bill 117 — NC Competes Act — and House Bill 372, the Medicaid reform bill, next week. The conference report for HB 117 is expected to include several other economic development policies, including details of the revised Job Development Investment Grant (JDIG) program.

Highlights of the budget include:

Economic Development/Taxes

  • Job Maintenance and Capital Development (JMAC) Fund
    Funds at $6.9 million for 2015-2016 and $7.5 million for 2016-2017.
  • Job Development Investment Grant (JDIG) Program
    Restructures the program to $57.9 million (15-16) and $71.7 million (16-17)
  • OneNC Small Business Fund
    $3 million in non-recurring funds.
  • Corporate Income Tax
    Continues the corporate income tax reduction trigger, forecasting a reduction to 3 percent in 2016.
  • Single Sales Tax Factor
    Phases single sales over three years beginning in 2016.
  • Sales Tax
    Expands the sales tax base for certain labor services with proceeds allotted to only certain rural counties.

  • Personal Income Tax (PIT)
    Reduces PIT from 5.75 percent to 5.499 percent in 2017; Increase the 2016 standard deduction by $500, totaling $15,500 for joint filers; Restores and expands tax deductions for medical expenses.

  • Historic Preservation Tax Credit
    Reinstates to a lesser degree the credit, which sunset at the end of 2014.

  • Film & Entertainment Grant Fund
    $30 million in non-recurring funds for 15-16 and 16-17.

  • Renewable Energy Tax Credit
    Sunsets in January 2016.

 

Transportation/Infrastructure

  • Highway Trust Fund
    Repeals the transfer of $216 million from the Highway Trust Fund to the General Fund.
  • DMV Fees
    Increases all DMV fees with revenues to be used toward funding additional Strategic Transportation Investment projects and DMV modernization.

  • Road Funding
    Additional $440 million

  • Light Rail Projects
    Caps the state funding for light rail projects at $500,000 per project.

  • Turnpike Authority Projects
    Increases the statewide cap for turnpike projects from nine to 11.

  • Port Modernization
    Additional $70 million

  • Infrastructure Bond
    Lays out the blueprint for the $2 billion infrastructure bond for capital projects.

 

Education/K-12

  • Teacher Assistants (TAs)
    Fully funds TAs and requires those monies be used only for TAs.
  • Classroom Sizes/Districts
    Reduces class size in first grade to 1:16 teacher-student ratio in 2016; Allows the State Board of Education to consolidate county school districts that share a border; Establishes a new definition for low-performing schools and school districts and mandates implementation of improvement plans.
  • Textbooks & Digital Learning
    Increases funding
  • Teacher Pay
    Increases the starting teacher salary from $33,000 to $35,000
  • Opportunity Scholarship Program
    Provides an additional $14 million.
  • Driver Education
    Fully funds driver education, includes provisions for comprehensive data collection and a study of how to improve the program.
  • School Connectivity Program
    Funds the initiative to bring broadband and Wi-Fi to all public schools.

Education/Universities

  • UNC Enrollment Growth Reserve
    Appropriates $31 million in recurring funds in 16-17 .
  • Veterans
    Funds in-state tuition for all veterans.
  • Deferred Admission Program
    Requires the UNC Systems and community colleges to collaborate in a study to establish a deferred admission program that will divert academically at-risk students into the community college system. Upon completion of an associate degree, the student receives guaranteed acceptance into a UNC system school.
  • Western Governor’s University
    Sets aside $2 million for the Western Governor’s University after the campus raises $5 million.

 

Education/Community Colleges

  • Tuition
    Increases tuition in the 2016 spring semester by $4.00/credit hour.

 

Healthcare

  • Medicaid
    Establishes the Medicaid Transformation Fund, providing $225 million in funds over the biennium. This money is to be used transform the state’s Medicaid system from fee-for-service to a fully-capitated, managed care system.
  • Hospitals & Charity
    Requires hospitals to publicly post how much charity care they provide annually.

 

Judicial

  • Special Superior Court
    Eliminates three special superior court judgeships.

  • Juveniles

Provides $2 million in recurring funds for expanded bed capacity for adjudicated juveniles in contracted and state-run facilities.

  • Mental Health
    Funds an additional 72 mental health beds at Central Prison, and includes another $5.6 million for mental health behavioral treatment units at eight prisons.
  • Law Enforcement & Body Cameras
    Offers $2.5 million in grants for body-worn cameras by local law enforcement agencies. Includes funds for cameras in highway patrol vehicles.
  • Court Modernization
    Provides funds for court modernization, including recurring funds for court information technology initiatives.

 

Miscellaneous

  • Department of Military & Veteran Affairs
    Establishes a new Department of Military & Veterans Affairs
  • Department of Information Technology
    Creates a new Department of Information Technology and transfers/consolidates from other agencies.
  • State Aquariums, Parks & Zoos
    Transfers the state aquariums, parks, and zoo from the Department of Environment and Natural Resources to a newly-established Department of Natural and Cultural Resources, in an effort to consolidate the management of state attractions under one department.

 

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (1)
Wednesday, September 9, 2015
September 9, 2015 Legislative Update

Labor Day Brings Continued Budget Negotiations

The current continuing resolution (CR), the temporary state spending plan is set to expire on September 18 but House and Senate leadership remain optimistic that they won’t need another CR.  Key budget leaders stayed through the holiday weekend to try to finalize negotiations. Senate and House leaders indicated yesterday that they were close to a finalized agreement, with only a few remaining items to finalize, such as drivers education.

Following any agreement, the legislative staff will need a couple days to finalize the bill before it can be introduced.  Therefore, the earliest we could see the finalized bill would be Wednesday or Thursday of this week. Regardless of introduction, legislative rules prohibit a vote on appropriation conference reports until the third legislative day following the introduction of the report. That means the earliest a vote could be taken on the budget conference report would most likely be next week.

 

Governor Signs Uber Bill into Law

Last week the Charlotte Chamber hosted the Governor's bill signing of Senate Bill 541, Regulate Transportation Networks Companies. Upon signing into law, the Governor stated, “This is all about people’s independence and flexibility ... The more choice, the better. The consumer wins.” The bill requires transportation network companies, such as Uber and Lyft to buy insurance coverage for their drivers and passengers and perform nationwide criminal background checks on drivers.  

The new law becomes effective October 1, 2015.

 

New Town/Municipality Caucus Formed

A new bipartisan caucus was formed last week in the General Assembly, the Town/Municipality Caucus. The caucus will be a joint caucus with both House and Senate members.  The mission of the caucus is to “create an opportunity [and] open environment for legislators with municipal experience to offer education about the State-Municipal partnership and to exchange information and ideas about legislation that will impact local government.”  The caucus hopes to bring greater awareness to how legislation will affect local governments.  

The Senate caucus leaders will be Sen. Wesley Meredith (R-Cumberland) and Sen. Joel Ford (D-Mecklenburg).  House caucus leaders are Rep. Mitchell Setzer (R-Catawba) and Rep. Susi Hamilton (D-New Hanover).

Presidential Primary Date

Last week the House failed to concur to the Senate’s changes to House Bill 373, 2016 Presidential Primary.  The bill would have established policies for a March 15, 2016 primary date for 2016 presidential candidates only.  The House voted 104-0 to fail to concur. 

House Republicans are exploring the possibility of holding all primary elections March 15, 2016.  Although this change is estimated to save $4-$6 million, by not holding a second primary election date in May 2016, some legislative members remain skeptical of the change.  Sen. Dan Blue (D-Wake) stated the new voter ID law would be in effect for those primary elections and he believes moving the date to March will hinder preparations for the new voter ID law.  

The bill now goes to conference committee, neither the House nor the Senate have appointed conference committee members yet.

 

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
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